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Aviation has always been a tough industry. With its global reach, reliance on technology and of course, heavy use of oil, it is exposed to many risks and threats. Much of this is outside the airline or operator’s control. This situation has been highlighted dramatically over the past two years, but challenges to success in the sector are nothing new. We take a look at some of the main risks faced as we enter 2022.

Ongoing COVID-19 Disruption

We cannot ignore the major threat that continues to affect the aviation industry. As any news report or government briefing will remind you, the pandemic is not yet over.

On the one hand, vaccination protection is improving, and governments are less focussed on lockdowns and travel bans than they were in 2020. The industry is also better prepared and, in many cases, ‘slimmed-down.’

On the other hand, many airlines and operators are increasingly suffering financially after two years of disruption. Whatever the next restrictions are, there is unlikely to be much forthcoming government support for the industry or workers. The impact of future variants is, of course, unknown, and remains a significant risk.

The Ongoing Impact of Brexit

Moving away from COVID, there are, of course, other factors to consider. In the UK and Europe, Brexit is a leading one. The UK has left the European Union (EU), but there is still plenty of related disruption to sort out.

For airlines and operators, there are changes to ownership and operation, with companies becoming much more restructured to their own regions. Border controls and checks will become more strict, too, with the removal of free movement.

There are complications as well for pilots. Pilots operating EU registered aircraft will require an EU license, and similarly, UK pilots will need a UK license. There are some short waivers in place, but the impact is getting closer.

Rising & Unstable Fuel Prices

The price of oil, and hence aviation fuel, has risen significantly since 2020. It may be some way off the high levels seen over the last decade, but it is still of concern to airlines. Fuel is one of the main costs of airline operation (around 30% by some estimates), and any increase has the potential to significantly affect profitability.

Of course, airlines have strategies to hedge against rising fuel prices, but this has been especially difficult with unpredictable future requirements during COVID. Over the last 20 years, the oil prices have proved very volatile (moving from a high of $126 in 2011 to a low of just $36 in 2016 as just one example). As in many industries, an unpredictable situation like this is very to manage.

Global Instability & The Threat of War

The price of oil, and hence aviation fuel, has risen significantly since 2020. It may be some way off the high levels seen over the last decade, but it is still of concern to airlines. Fuel is one of the main costs of airline operation (around 30% by some estimates), and any increase has the potential to significantly affect profitability.

Of course, airlines have strategies to hedge against rising fuel prices, but this has been especially difficult with unpredictable future requirements during COVID. Over the last 20 years, the oil prices have proved very volatile (moving from a high of $126 in 2011 to a low of just $36 in 2016 as just one example). As in many industries, an unpredictable situation like this is very to manage.

Pilot Shortages

This was an issue before the pandemic and, especially in some regions, will be worse. Many pilots have left the industry over the last two years with the reduced activity seen. In 2018, Boeing predicted demand for 790,000 new pilots over the next 20 years. This was due both to expansion in aviation globally and a high proportion of older pilots reaching retirement age.

The shortage post-COVID has already been seen in the recovering US market. New airline Breeze Airways has had to increase pay by over 10% and expand recruitment to Australia to secure new pilots for its fleet (as reported by Business Insider).

Uncertainty Over Business Travel

For many airlines, the changing demographics of travel in 2022 and beyond presents a real risk to their operations. Post-COVID, business travel is likely to be slow to recover – with VFR and leisure traffic taking the lead. Uncertainty, changing restrictions, and risk of quarantine or delays remain red flags for businesses.

When it does recover, many expect it to look quite different. More and more meetings and interactions have moved online, and business has coped for two years without much travel. There will still be a need for movement and in-person contact, but undoubtedly less.

The provision and marketing of business travel will need to change. Legacy airlines that rely on filling lucrative business and first class cabins will need to rethink pricing models. On the positive side, though, charter companies are likely to see new interest from businesses hiring aircraft.

Climate Change

Climate change is a big topic currently, and it will affect the aviation industry in many ways. Pledges to half carbon emissions are leading to changes in aircraft technology, fuel, and even aircraft tracking and spacing.

Despite its efforts to lower its impact, the industry, of course, is well exposed to the effects of climate change. The past few years have seen increasing levels of flight disruption due to extreme weather events, and more of this remains a real risk.

Aircraft Safety & Regulation

Aviation is a well-regulated and protected industry. This has always presented a risk to operators and continues to do so. In particular, airlines remain subject to restrictions in aircraft operations and safety that remain outside of their control.

The technical issues, and subsequent grounding, of the Boeing 737 MAX is a very good example of this. Looking slightly ahead, several other new aircraft are coming onto the market. This includes new launches from Boeing and Airbus (most notably the 777X and the A321XLR), as well as new developments from new Russian and Chinese manufacturers.

Air-Rage & Safety Incidents

As a final thought for 2022, we are likely to see a continued increase in air rage and related safety incidents.  During the first half of 2021, there were 3,000 such incidents in the US (according to the Federal Aviation Administration) – much more than normal. Much of this is related to mask-wearing, but other continuing restrictions are causing upset to passengers. Tensions remain high, and the confined aircraft cabin is never a good place for that.

As well as the immediate safety risks of such incidents, they also present a reputational risk for airlines. No company wants the publicity that goes with disruptive passengers, abuses of staff, and emergency situations affecting flights. Cutting off the problems before they arise will be a growing focus of many airlines.

Final Thoughts

The aviation industry had always faced significant risks and challenges. With global operations and operating at the leading edge of technical development, operators are exposed to wide-ranging and unpredictable events. Added to this is a rigorous enforcement of safety standards. COVID-19 has introduced additional risks to an industry already well used to having to manage them.

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If you have any questions about flight planning and its complexities, feel free to contact our team today for more information.




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